London Councils

Minutes of the London Councils Leaders’ Committee held on 10 December 2013 Mayor Jules Pipe chaired the meeting

Present: BARKING AND DAGENHAM Cllr Rocky Gill BARNET Cllr Richard Cornelius BEXLEY Cllr Teresa O’Neill BRENT Cllr Mohammed Butt BROMLEY Cllr Stephen Carr CAMDEN Cllr Sarah Hayward CROYDON - EALING Cllr Julian Bell ENFIELD Cllr Doug Taylor GREENWICH Cllr Chris Roberts HACKNEY Mayor Jules Pipe HAMMERSMITH & FULHAM Cllr Nicholas Botterill HARINGEY Cllr Claire Kober HARROW Cllr Susan Hall HAVERING Cllr Michael White HILLINGDON Cllr David Simmonds HOUNSLOW Cllr Jagdish Sharma ISLINGTON Cllr Richard Watts KENSINGTON & CHELSEA Cllr Nicholas Paget-Brown KINGSTON Cllr Liz Green LAMBETH Cllr Paul McGlone\* LEWISHAM Mayor Sir Steve Bullock MERTON Cllr Stephen Alambritis NEWHAM Cllr Lester Hudson REDBRIDGE Cllr Keith Prince RICHMOND UPON THAMES Cllr Lord True SOUTHWARK Cllr Peter John SUTTON Cllr Ruth Dombey TOWER HAMLETS Mayor Lutfur Rahman WALTHAM FOREST Cllr Clyde Loakes WANDSWORTH Cllr Guy Senior WESTMINSTER Cllr Philippa Roe CITY OF LONDON Ms Catherine McGuiness LFEPA -

- Also GRANTS

Ex officio (under the provisions of Standing Order 2.2) CAPITAL AMBITION Mr Edward Lord JP OBE CC

Ex officio (under the provisions of Standing Order 2.4) EQUALITIES Cllr Marie Pye

Apologies: BARKING AND DAGENHAM Cllr Liam Smith London Councils officers and Mr Chris Bilsland (Chamberlain, City of London) and Mr Bob Claxton (LB Wandsworth), were in attendance for item 4 Pensions Working Group: Progress report and proposed next steps towards a London LGPS CIV.

The Chair began the meeting by apologizing to Cllr Richard Watts, Islington’s new leader, for neglecting to welcome him at the previous meeting of Leaders’ Committee. He also welcomed Ms Catherine McGuiness substituting from the City of London and attending Leaders’ Committee for the first time.

1. Declarations of interest

No interests were declared.

2. Minutes of Leaders’ Committee held on the 12 November 2013

Leaders’ Committee agreed the minutes of Leaders’ Committee held on the 12 November 2013

3. Grants Programme 2013/15: Quarter Two update report

Cllr Paul McGlone (Labour, Grants Committee) introduced the report saying that:

- it set out achievements during the six months of the programme for the 35 commissions agreed at Grants Committee 20 February 2013

- it had originally been provided to Grants Committee on 6 November and was being brought to Leaders’ Committee as requested

- the Grants programme was on track and largely delivering on targets

- there was a tough monitoring regime in place based on a triangulation of input from

  - the recipient group
  - Grants officers and the boroughs themselves all underpinned by member and officer visits to the commissions

- the focus of the scheme was to deliver pan-London provision that did not duplicate borough services and also provided value-for-money

- the process leading to the review of the Grants programme was already mapped out and would start with an analysis of the performance of commissions.

- a more coherent business plan was being sought from London Funders to justify the £60,000 grant made to it

Leaders’ Committee agreed to note:

- the results of the Red Amber Green (RAG) risk rating, and approved actions suggested by officers in this regard.

- provider progress against profile and approved actions proposed by officers and that the number of red ratings had decreased from three (9%) in Q1 to zero in Q2.

- the following areas highlighted by the Chair of the Grants Committee:

  - No interventions regarding reductions in funding to organisations were recommended at this six month review stage;

  - Twenty-five monitoring visits had been conducted by the end of Q2, with three organisations to receive priority visits in Q3 (Hopscotch Asian Women’s Centre – 25 November, Inclusion London – 13 November, Age Concern – 29 November)

The Chair concluded by proposing that the Grants section of item 9 The London Councils Business Plan: Portfolio Holder Progress Reports should be taken at this point in the meeting and invited questions or comments on it but received none. 4. Pensions Working Group: Progress report and proposed next steps towards a London LGPS CIV

The Chair welcomed Mr Chris Bilsland (Chamberlain, City of London) and Mr Bob Claxton (LB Wandsworth), who he informed the committee had been working with London Councils’ Director, Fair Funding, Performance and Procurement on the set of proposals that had come out of previous discussions, in particular at Leaders’ Committee in March 2012, November 2012, December 2012, and May 2013, and more lately at the Executive in September and November 2013. The Chair introduced the report saying:

- participation in any fund that may be established would be voluntary
- that significant financial benefits could accrue from establishing a CIV from reduced costs and, for many, improved investment returns
- a collaborative approach provided opportunities to potentially invest in types of assets that smaller individual funds may not have been able to easily access, for instance direct investment in appropriate infrastructure projects.

The Chair invited the guest speakers to contribute and Mr Bilsland expressed his view that ‘no change’ was not likely to be an option at the end of the Government consultation. He went on to say that the work described in the report pre-dated the Government’s decision to release an invitation to tender seeking professional advice and evidence looking at three potential, fully-costed, collaborative models:

- A common investment vehicle at England and Wales level, with asset allocation strategies still determined by the local pension funds
- 5-10 common investment vehicles across England and Wales, for example based on aggregate fund size or geographical areas, again with asset allocation strategies decided by local governance structures
- 5-10 merged funds across England and Wales, grouped on the same basis as the common investment vehicles above, but with decision-making taken by new governance arrangements at the merged fund level.

The third option, he felt sure, had been included because of the work initiated by London Councils. Leaders’ Committee agreed to indicate its support for the establishment of a London LGPS CIV and that London Councils should:

- continue to facilitate further work, under the oversight of the PWG, with the next step being the engagement of expert legal and financial services advisers and the formulation of a robust business case and formal proposal to proceed with implementation
- explore, as part of this work, how London Councils could best support collective borough interests where those boroughs agreed to participate in the ASC and invest in the CIV
- recruit a suitably qualified Project Manager and any other staff required
- establish a designated fund with contributions from those boroughs interested in exploring these proposals
- maintain on-going dialogue with HM Government relating to the Government’s review of local authority pensions schemes which may directly impact upon these proposals and their implementation.

5. Growth Deal for London

The Chair introduced the report saying:

- Leaders’ Committee on 12 November 2013 had endorsed the agreement made with the Mayor of London to advance opportunities for devolution to London through a Growth Deal. The specific proposals covered:

  - Welfare to Work including Skills
  - Housing Investment and Supply

- Subsequently, the London Enterprise Panel (LEP) had also given its support to the draft Growth Deal submission which was currently being finalised in collaboration with the GLA, in preparation for the deadline on 19 December 2013. • It was anticipated that informal feedback from Government on the proposals would begin to emerge early in the New Year, and the focus would move quickly towards preparation of a more detailed final submission for March 2014.

• London was likely to be challenged to calibrate the scale of its ambitions more precisely in relation to delivering better outcomes, and to demonstrate a readiness to deliver on the proposals through borough groupings.

Cllr Philippa Roe (Conservative, Westminster) expressed her support for the proposals and said that there was a need to demonstrate that different boroughs and different political parties could work together. She went on to suggest that a sub-group could be a vehicle to take the work forward and the Chair undertook to explore the idea and bring back a proposal.

Leaders Committee agreed:

• to note the 'in principle' endorsement of the LEP for the headline Growth Deal proposals, as agreed between London Councils and the Mayor of London

• to note that the initial response from Government was likely to lead to the need for finer calibration of the scale of our ambitions in relation to delivering better outcomes and a need to demonstrate a readiness to deliver on the proposals through borough groupings.

• that the Chair and leading members work with officers to develop a more detailed and costed case early in 2014, drawing on the expertise of senior officers in member authorities.

6. Local Government Finance – Key Issues

The Chair introduced the report saying that London local government could see a potential funding gap of £3.4bn by 2020 – a shortfall of 31 per cent. One major issue that needed consideration was how London Councils should respond to the Government's approach to top slicing of the New Homes Bonus in London. Cllr Richard Watts (Labour, Islington) pointed out that his borough and Tower Hamlets were the biggest losers and he could not see any reasoning why local authorities outside London were able to retain New Homes Bonus but not in London. He argued that the impact was not just in the headline losses but the further losses that came under it and that a line in the sand needed to be drawn. He called for the consideration of Judicial Review (JR) of the decision on the New Homes Bonus.

Cllr Peter John (Labour, Southwark) pointed out that if the New Homes Bonus went into the LEP, boroughs would be the largest funder of it, a matter that was not reflected in its constitution. He supported the idea of exploring a judicial review.

Cllr Sarah Hayward (Labour, Camden) argued that there was not the influence over the LEP that the level of funding would imply if the New Homes Bonus went into it and even if legal action was not eventually taken, advice on it should be sought.

The Chair suggested that Government thinking behind the reason why London was being treated differently could be sought via an FoI while Cllr Teresa O’Neill (Conservative, Bexley) suggested a letter may achieve the same goal. The Chair proposed a letter in the first instance and if it did not elicit the required response, it should be followed by an FoI application.

Cllr Richard Cornelius (Conservative, Barnet) pointed out that JR was costly and normally ineffective and should be something to explore only after all other alternatives had failed.

The Chair summed up by saying that:

- he noted the reservations expressed about a JR but that all options remained in play
- a letter would be written to Government to establish why London was being treated so differently in relation to the New Homes Bonus and if this did not elicit the information required an FoI application would be made
- that legal advice would be sought on the potential JR and this would be considered by the three party group leaders

Leaders’ Committee agreed to support the approach summarised by the Chair above and to note the report. 7. Beyond 2011: future census

The Chair introduced the item saying that the purpose of the paper was to seek approval for London Councils’ response to the ONS consultation on *Beyond 2011: The census and future provision of population statistics in England and Wales*.

Cllr Roe pointed out that her borough was something of an outlier. She saw the proposals as merely tinkering at the edges when she would have been happier seeing a more radical approach.

Leaders’ Committee agreed

- to note the report
- the consultation response included in an appendix to the report

8. Proposed Revenue Budget and Borough Subscriptions and Charges 2014/15

The Chair introduced the report saying that it had received members’ approval on previous occasions.

Leaders’ Committee agreed the following borough subscription and charges for 2014/15:

- The Joint Committee subscription for boroughs of £172,427 per borough for 2014/15, the same level as for 2013/14. The City of London will continue to pay £168,664, in recognition of the fact the City is historically not part of the regional Local Government Employers (LGE) arrangements
- The Joint Committee subscription for the MOPAC and the LFEPA of £16,700 for 2014/15, the same level as for 2013/14
- An overall level of expenditure of £10 million for the Grants Scheme in 2014/15 (inclusive of £2 million gross ESF programme) that taking into account the application of £1 million ESF grant, net borough contributions for 2014/15 should be £9 million, the same level as for 2013/14 • The Parking Core Administration Charge of £1,500 per borough and for TfL (2013/14 - £1,500)

• The total Parking Enforcement Service Charge of £0.4519 per PCN, which will be distributed to boroughs and TfL in accordance with the number of PCNs issued in 2012/13 (2013/14 - £0.4519 per PCN)

• The Freedom Pass Administration Charge of £8,674 per borough (2013/14 - £8,674)

• The Taxicard Administration Charge of £4.00 per permit (2013/14 - £4.00)

• The Lorry Ban Administration Charge of £98,612 in total, net of estimated PCN income, to be apportionment by population figures, with TfL paying the average borough charge of £3,287 (2013/14 - £103,172; TfL charge £3,439)

• The Parking and Traffic Appeals Charge of £38.54 per appeal or £36.92 per appeal where electronic evidence is provided by the enforcing authority (2013/14 - £41.38/£39.81 per appeal)

• Congestion Charging Appeals – to be recovered on a full cost recovery basis, as for 2013/14, subject to the continuing agreement of the GLA under existing contractual arrangements

• The TRACE (Electronic) Charge of £10.40 per transaction (2013/14 - £10.40)

• The TRACE (Fax) Charge of £12.83 per transaction (2013/14 - £12.83) and

• The PEC, PED and PIE Charges of £0.20 per transaction (2013/14 - £0.20).

On the basis of the above subscriptions and charges, the Leaders’ Committee agreed to approve:

• The consolidated revenue expenditure budget for 2014/15 for London Councils of £392.755 million

• The consolidated revenue income budget for 2014/15 for London Councils of £392.755 million

• Within the total income requirement, the use of London Council reserves of £1.902 million in 2014/15, inclusive of the £1.309 million repatriation to boroughs in 2014/15

The Leaders’ Committee also agreed to note:

• The position in respect of forecast uncommitted London Council reserves as at 31 March 2014 and • The positive statement on the adequacy of the residual London Councils reserves issued by the Director of Corporate Resources.

9. London Councils Business Plan: Portfolio Holder Progress Reports

The Chair introduced the report by saying that the Chair of the Transport and Environment Committee (TEC), Cllr Catherine West was representing London Councils at another event and was, therefore, absent and unable to introduce her part of the report. He asked if there were any questions or comments, they should be supplied to him to be dealt with at the next meeting. The second part of the report on Grants had been disposed of under item 3.

10. Minutes and Summaries

Leaders’ Committee agreed to note the minutes and summaries

• Capital Ambition – 7 October • Transport & Environment Committee – 24 October • Transport & Environment Executive Sub Committee – 14 November.

Action Points

| Item | Action | Progress | |------|--------|----------| | 4. | Pensions Working Group: Progress report and proposed next steps towards a London LGPS CIV | PAPA Fair Funding | Advisers engaged. | | | Work toward the establishment of a London LGPS CIV and that London Councils to: | Engagement of Project Management resource under review. | | | • continue to facilitate further work, under the oversight of the PWG, with the next step being the engagement of expert legal and financial services advisers and the formulation of a robust business case and formal proposal to proceed with implementation | Invoices being raised to committed boroughs for the designated fund. | | | • explore, as part of this work, how London Councils could best support collective borough interests where those boroughs agreed to participate in the ASC and invest in the CIV | Dialogue with | | | • recruit a suitably qualified Project Manager | | | and any other staff required

- establish a designated fund with contributions from those boroughs interested in exploring these proposals
- maintain on-going dialogue with HM Government relating to the Government’s review of local authority pensions schemes which may directly impact upon these proposals and their implementation.

| 5. | Growth Deal for London | |----|------------------------| | | The Chair and leading members work with officers to develop a more detailed and costed case early in 2014, drawing on the expertise of senior officers in member authorities. |

| 6. | Local Government Finance – Key Issues | |----|--------------------------------------| | | A letter would be written to Government to establish why the New Homes Bonus would not be going to boroughs and if this did not elicit the information required an FoI application would be made | | | Legal advice to be sought on a JR and proceeding with one would require the agreement of the three party group leaders |

| 7. | Beyond 2011: future census | |----|---------------------------| | | Submit the response. |

| | Government continuing. | | | Discussions are in train with a view to agreeing the scope of a detailed submission | | | Letter sent. | | | Seeking legal advice. |